Gold edged higher today as gains in stock markets around the globe reduced demand for the safe-haven US dollar and prompted investors to buy riskier assets.
Demand for equities and commodities was driven by a report in China’s state owned Shanghai Securities News, which said demand for loans was on the rise following the government’s decision to fast-track approvals for major infrastructure projects to support economic growth.
In addition, the latest opinion polls in Greece showed that pro-bailout parties have gained support and could secure enough votes in the June 17 election to form a coalition.
However, the American currency received a little support from a surge in Spain’s borrowing costs that came amid speculation that the government is preparing to issue new debt to refinance the country’s fourth largest bank Bankia.
The increase in Spain’s borrowing costs added to fears that it may require an international bailout to avert bankruptcy.
Gold traded at US$1,576/oz, up US$3 from Monday’s close. Other precious metals were headed in the same direction today with silver tacking on 11 cents top reach US$28.54/oz and platinum rising US$7 to US$1,440/oz.
